Kawasaki Motors Corp. v. Superior Court

Where an automotive dealer protests the termination of its franchise to the New Motor Vehicle Board and the board overrules the protest, judicial review should be conducted under the substantial evidence test, not the independent judgment test. Because the trial court applied the wrong standard, we issue a writ of mandate directing the trial court to reverse its decision.

Factual and Legal Background

Petitioner, Kawasaki Motors Corp., U.S.A., entered into a dealer sales and service agreement with real parties in interest, Saba A. Saba, SBD Partners, Inc., and Honda Kawasaki SportCenter (collectively Saba). This agreement imposed various conditions on Saba, including the following: (1) Saba was prohibited from moving to a different location; (2) Saba was to maintain an adequate credit line; (3) Saba was to maintain adequate facilities; and (4) Saba was to maintain a model inventory. The agreement provided Kawasaki had the right to terminate the agreement for Saba’s violation of the provisions of the contract.

Kawasaki concluded that Saba violated these contract provisions and sent Saba notices terminating the agreement. The notices specified other alleged breaches of…